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CATS 2030 Transit Plan is Dead


monsoon

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Learning more about the final stimulus bill, there is evidently $1.5 Billion in USDOT discretionary funding, for which "shovel-ready" highway and transit projects can both compete. Seems then that North Corridor Commuter Rail could have one get-out-of-TIF-free card left to play. And with most of the transportation money in the stimulus going to highway-loving NCDOT to distribute under existing programs, a special grant may be the only shot.
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CATS assumptions on development around these lines and their ability increase to the tax base are like every other projection they have made. Woefully optimistic, not realistic, and if based on their past record of these things, completely wrong. One only has to look at the state of real estate development on the South LRT between SouthEnd and Woodlawn to see that absolutely nothing has happened over the last 18 months and many projects are dying a slow to fast death.
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The sales tax can cover the actual trains for North CR, if other project components are paid by other sources. Buying new fleet is not cheap, but it is hardly the most expensive part of the project. I imagine the stimulus, if any, given what little discretionary funds there are, would best be spent on the NS grade-separation and/or the terminus station in Uptown. However, the individual stations outside of Uptown, including the three in Charlotte, and their immediate grade crossings, make sense for TIF. In other words, spend increased tax base from station-area development on station-area infrastructure.

Why is TIF so controversial? County sales taxes could still be paying for trains, sidings, an Uptown inspection/cleaning facility, and grade crossings outside of station areas. Again, it's up to North Meck Towns on how soon they actually want to see trains running, if the sales tax and possibly stimulus can only cover most, but not all, of the full project cost.

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If not TIF, Towns should be at least willing to pay as Charlotte did along the Blue Line. You see, Charlotte did not use the County sales taxes, state match, or New Starts funds for the South Corridor Infrastructure Program (SCIP), instead using road bonds passed by City voters. These were added improvements for station accessibility not included in the New Starts project. Charlotte will likely do something similar around its three stations on the North CR line. Hence, the North Towns should also put some added funding towards immediate station-area infrastructure that the County sales tax can't cover. Otherwise, it could be a very long wait for the Purple Line.

I still think that TIF is the best tool since it taps incremental increases in tax base that would have not been available if not for the catalyzing project. I imagine using bonds would be more controversial (as it was even in Charlotte with SCIP), since that is at an opportunity cost to other infrastructure needs elsewhere in a community.

Simply put, the Towns should not expect the County sales tax to cover all the costs of this project, when such funding has never covered any of the rail corridors fully. And recent history proves that Charlotte has stepped up to the plate in coming up with additional local funding sources beyond the sales tax for other corridors. Now, it's North Mecklenburg's turn, if they truly wish to have timely delivery of this corridor.

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The MTC (of which Huntersville is a part of ) made this decision a long time ago that the Sales Tax will cover approximately 25% of the cost of building rail. Any infrastructure improvements outside of the rail line will have to be paid for by the locality. In the North Lines case they uped the Sales Tax contribution to 33% of the total project cost.
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And I personally think it's okay if the sales tax covers more than 33% of North, since it has the lowest total costs of any rail corridor. But more than 50%? Not likely, until the economy recovers. Hence, without creative financing, you're talking a delayed timeframe for completion. And since MTC approves corridor priorities and controls the sales-tax purse, you're then talking about delaying all other corridors (unless BLE dies under FTA scrutiny, which is less likely under the new Administration and a future Transportation Bill).

And just to be clear, it's not MTC backing down from its promises. There is still enough sales tax revenues to fund North by a higher percentage than any other rail corridor (given the reality of it being the cheapest). You just can't cover the full cost (especially in this downturn). But most importantly, the 2030 Plan never assumed North would be built entirely from the County sales tax to begin with. So the real broken assumption in the 2030 Plan is more accurately the State of North Carolina. The State funding rail corridors in this downturn, given their more dire fiscal condition, is what has changed the most since the System Plan was last revisited.

But let's say the state does match the County sales tax dollar-for-dollar like other corridors assumed. Well then, if sales taxes cover 33% of the project, that's still only 66% of your project covered. Where do you come up with the remaining third? Stimulus? If so, that's likely what the State will likely pass through as its contribution, still leaving you short.

Alright, let's say that this project does get more than 50% non-local match of passed-through stimulus funding (which is also a stretch given the competition and the state oversight), well you're still talking an opportunity cost to the region.

In summary, North is luckily the cheapest and most shovel-ready, but haste makes waste. The backlog of Mecklenburg transportation needs won't go away with the stimulus, but it seems some will be temporarily satisfied with a quick-fix that is more frankly a shell-game of the State getting out of its obligations. But rather than just quick-fix the shovel-ready corridor, Mecklenburg would be better served to best leverage what little sales taxes it can now expect in this downturn and still keep multiple corridors on a reasonable timeframe.

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^And that is the failure in the logic. There is no guarantee there will be any developers yet the city is still expected to pay out the money. This is the difference and why what they did with Byrton isn't the same situation. This isn't an argument with me. I am only stating what the city has said. The question was why are TIFs controversial, and I gave the reasons why this particular TIF plan is controversial and it is a matter of public record. I am not sure what the argument might be.

This is CATS plan, and hence CATS responsibility to get it financed. They can try all they want to pass the buck to someone else, but it goes back to the original premise of this topic. The 2030 plan is dead.

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Since the 2030 system plan already envisioned each rail corridor receiving a majority of its funding from other sources than the County sales tax, this is hardly a new "passing of the buck." In other words, sharing the cost was always the plan, it's just now those "passed bucks" won't likely be from State or Federal sources. Still, tapping more local funding is not a new concept either, with the South Corridor Infrastructure Program (SCIP) as the best example to-date.

However, SCIP was financed through City-backed bonds. As another poster has noted with Tax Increment Financing, the developer could assume the risk, instead of the Town, as would be the case with regular bonds. And as I noted earlier, bonds backed by Town-wide revenue would obviously be at an opportunity cost of what else you could have debt-financed, especially in these harder times and with competing infrastructure needs elsewhere in the Town. Meanwhile, TIF only comes at an opportunity cost of what else you could have done with new revenues. But since you wouldn't have that incremental increase in revenue without the new development, and the development would not have likely happened or at least be as big of a boost without the catalyst of the rail line, it makes darn good sense to use that as a gap-financing tool, especially for the stations themselves, since those have the most localized benefit and payoff in development.

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Not true. The developer has to exist and be committed and be signed up in the TIFF for it to exist. The TIFF has to exist before the MTC and CATS will go to the FRA for the loan to fill in the funding gap If no developer wants to sign up for the TIFF...then there will not be an FRA loan and hence no North Line. The plan never was to go ahead and take out the loan and then hope a developer would come along.
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More accurately, the 2030 Plan will be stalled if folks think a stimulus grant is the only way to keep it on schedule. Likewise, raising the sales tax rate isn't the only way. Think outside the box! The 2030 Plan did think outside the County-sales-tax box, combining various sources for each corridor. Hence, there are still ways to keep on track, as it was always intended to be a unique blend of funding sources for varied corridors.

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I guess the NE area could always go back to that ridiculous idea bruton smith had for having a monorail from the speedway to the hall of fame (yeah right) :lol: Really if light rail was near me up here I would actually use it sometimes, too bad they keep having these issues.

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The issue all comes down to the fact that a toll is needed on 77, 85, and maybe 485 and should be used to fund transit and have the added benefit of discouraging the nasty, destructive habit of car-centric transportation. I'm sure there are some roadblocks in the way to getting this done, but the future of the city depends on transit - we need to overturn whatever laws or restrictions are preventing placing tolls on the interstates. Now THAT is thinking outside the box!

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